President Donald Trump on Tuesday announced a $2.9 billion U.S. Navy contract for Anduril Industries’ planned submarine manufacturing shipyard at Sparrows Point, Maryland, adding federal backing to a $3.7 billion private investment by the company. The announcement was made at the Tradepoint Atlantic site in Baltimore County on Oct. 6, 2026.
Trump also pledged $21 billion in future purchases once the facility is operating, according to the Baltimore Sun. The Navy contract is tied to demonstrated production outcomes, meaning Anduril, not the taxpayer, takes on most of the execution risk, per an Anduril press release. Combined, the Navy contract and private investment total $6.6 billion for the submarine industrial base.
The facility, named Arsenal-2, will be built on a 187-acre site and span more than 2 million square feet, roughly the size of 40 football fields. It will manufacture critical components and large-scale assemblies for Virginia-class submarines, delivering them to General Dynamics Electric Boat and Huntington Ingalls Industries’ Newport News Shipbuilding for final assembly. The work will begin with components such as torpedo tubes and progress to modules and eventually super modules, according to Anduril President and Chief Strategy Officer Christian Brose.
The project is expected to create 3,100 direct jobs and support more than 11,000 indirect jobs, with an estimated $2 billion in annual economic output and $312 million in annual wages, the company said. Maryland and Baltimore County are considering additional public support that could reach roughly $481 million, with new appropriations requiring legislative approval, the Baltimore Sun reported.
Permitting and site preparation will begin immediately, with construction starting once approvals are in place. Initial operations are expected to come online in 2030, with production scaling progressively thereafter, per Anduril. The company is also building a 160,000-square-foot facility in Orange County, California, to manufacture critical Virginia-class components and validate production methods ahead of Arsenal-2’s opening.
Vice Adm. Robert Gaucher, the Navy’s director of submarine programs, said the planned facility could add up to 9 million production hours per year to the submarine supply chain, a 15% surge in total capacity. Acting Navy Secretary Hung Cao said the Navy’s mandate is to build a “golden fleet” — a maritime force “designed to dominate the seas, protect overwhelming power, and guarantee maritime supremacy for the next century.”
Anduril CEO Brian Schimpf said conversations with the Navy began more than two years ago, and the company initially concluded it could not help build submarines. “America already knows how to build the best submarines in the world,” Schimpf said. “The challenge now is to build the industrial depth required to produce more of them and sustain that advantage for decades.”
Sources: Naval News · DoD News